1.

ROMAN CATHOLIC OF MALOLOS V. IAC

191 SCRA 411
FACTS:
Petitioner was the owner of a parcel of land. It then entered into a contract of lease
agreement with Robes-Fransisco Realty for the parcel of land. The agreement was that
there would be downpayment plus installments with interest. Robes-Fransisco was then in
default. Knowing that it was in its payment of the installments, it requested for the
restructuring of the installment payments but was denied. It then asked for grace period
to pay the same and tendered a check thereafter. Such was refused and the contract was
cancelled.

ISSUE: W/N an offer of a check is a valid tender of payment of an obligation under a contract

HELD:
A check whether a manager’s check or ordinary check is not legal tender and an offer of a
check in payment of a debt is not valid tender of payment and may be refused receipt by the
obligee or creditor. As this is the case, the subsequent consignation of the check didn't
operate to discharge Robes-Fransisco from its obligation to petitioner.

2.

PNB VS CONCEPCION MINING

5 SCRA 745
FACTS: A promissory note dated march 12, 1954 was executed by Vicente Legarda, president of
Concepcion Mining Company, and Jose Sarte. On the face of the promissory note partially reads:

NINETY DAYS after date, for value received, I promise to pay to the order of the Philippine
National Bank . . . .

The promissory note matured and without payment from the makers. PNB sued Concepcion
Mining and Sarte.

ISSUE: Whether or not the estate of Legarda should be included in the suit.

HELD: No. There is no need for pursuant to Section 17 (g) of the Negotiable Instruments Law:

SEC. 17. Construction where instrument is ambiguous. — Where the language of the
instrument is ambiguous or there are omissions therein, the following rules of construction
apply:

xxx xxx xxx

(g) Where an instrument containing the word “I promise to pay” is signed by two or more
persons, they are deemed to be jointly and severally liable thereon.

3.

PNB V. CA
25 SCRA 693
FACTS:
Lim deposited in his PCIB account a GSIS check drawn against PNB. Following standard
banking procedures, the check was sent to petitioner for clearing. He didn’t return said
check but paid the amount to PCIB as well as debited it against the account of GSIS. Thereafter,
a demand was received from GSIS asking for the credit of the amount since the signatures
found in the check were forged. This was done by PNB and it now comes after PCIB but the
latter wouldn’t want to return the money.

ISSUE: W/N PCIB should refund the amount to PNB

HELD:

Acceptance is not required for checks, for the same are payable on demand. Acceptance
and payment are distinguished with each other. The former pertains to a promise to perform an
act while the latter is the actual performance of the act.

PNB had also been negligent with the particularity that it had been guilty of a greater degree of
negligence because it had a previous and formal notice from GSIS that the check had been lost,
with the request that payment be stopped. Just as important is that it is its acts, which are the
proximate cause of the loss.

4.

PRUDENTIAL BANK V. CIR

GR NO. 180390 July 27, 2011
Petitioner Prudential Bank[5] is a banking corporation organized and existing under Philippine
law.[6] On July 23, 1999, petitioner received from the respondent Commissioner of Internal
Revenue (CIR) a Final Assessment Notice No. ST-DST-95-0042-99 and a Demand Letter for
deficiency Documentary Stamp Tax (DST) for the taxable year 1995 on its Repurchase Agreement
with the Bangko Sentral ng Pilipinas [BSP], Purchase of Treasury Bills from the BSP, and on its
Savings Account Plus [SAP] product, in the amount of P18,982,734.38

Petitioner protested the assessment on the ground that the documents subject matter of the
assessment are not subject to DST.

Petitioner contends that its SAP is not subject to DST because it is not included in the list of
documents under Section 180 of the old NIRC, as amended.[24] Petitioner insists that unlike a
time deposit, its SAP is evidenced by a passbook and not by a deposit certificate.[25] In
addition, its SAP is payable on demand and not on a fixed determinable future.[26] To support
its position, petitioner relies on the legislative intent of the law prior to Republic Act (RA) No.
9243[27] and the historical background of the taxability of certificates of deposit

ISSUE: W/N Petitoners SAP with a higher interest is subject to DST

HELD:

Petitioners Savings Account Plus is subject to Documentary Stamp Tax.

DST is imposed on certificates of deposit bearing interest pursuant to Section 180 of the old
NIRC, as amended, to wit:

Sec. 180. Stamp tax on all loan agreements, promissory notes, bills of exchange, drafts,
instruments and securities issued by the government or any of its instrumentalities, certificates
of deposit bearing interest and others not payable on sight or demand. On all loan agreements
signed abroad wherein the object of the contract is located or used in the Philippines; bills of
exchange (between points within the Philippines), drafts, instruments and securities issued by
the Government or any of its instrumentalities or certificates of deposits drawing interest, or
orders for the payment of any sum of money otherwise than at the sight or on demand, or on all
promissory notes, whether negotiable or non-negotiable, except bank notes issued for
circulation, and on each renewal of any such note, there shall be collected a documentary stamp
tax of Thirty centavos (P0.30) on each Two hundred pesos, or fractional part thereof, of the face
value of any such agreement, bill of exchange, draft, certificate of deposit, or note: Provided,
That only one documentary stamp tax shall be imposed on either loan agreement, or promissory
note issued to secure such loan, whichever will yield a higher tax: provided, however, that loan
agreements or promissory notes the aggregate of which does not exceed Two hundred fifty
thousand pesos (P250,000.00) executed by an individual for his purchase on installment for his
personal use or that of his family and not for business, resale, barter or hire of a house, lot,
motor vehicle, appliance or furniture shall be exempt from the payment of the documentary
stamp tax provided under this section.

A certificate of deposit is defined as a written acknowledgment by a bank or banker of the

receipt of a sum of money on deposit which the bank or banker promises to pay to the depositor,
to the order of the depositor, or to some other person or his order, whereby the relation of
debtor and creditor between the bank and the depositor is created.[34]

The fact that the SAP is evidenced by a passbook likewise cannot remove its coverage from
Section 180 of the old NIRC, as amended. A document to be considered a certificate of deposit
need not be in a specific form.[41] Thus, a passbook issued by a bank qualifies as a certificate of
deposit drawing interest because it is considered a written acknowledgement by a bank that it
has accepted a deposit of a sum of money from a depositor

5.
PCIB V. BALMACEDA
GR no. 158143 Sept 21, 2011
FACTS:
PCIB filed an action for recovery of sum of money with damages before the RTC against
AntonioBalmaceda, the Branch Manager of its Sta. Cruz, Manila branch. In its complaint, PCIB
alleged thatbetween 1991 and 1993, Balmaceda, by taking advantage of his position as branch
manager,
fraudulently obtained and encashed 31 Manager’s checks. PCIB then moved to be allowed to file
an
amended complaint to implead Rolando Ramos as one of the recipients of a portion of the
proceeds
from Balmaceda’s alleged fraud. PCIB
also increased the number of fraudulently obtained and
encashed Manager’s checks to 34 in which the RTC granted.
Since Balmaceda did not file an Answer, he was declared in default. On the other hand, Ramos
filed an Answer denying any knowledge of Balmace
da’s scheme. The RTC then issued a decision in favor of
PCIB, where the RTC found that Balmaceda, took undue advantage of his position and authority
asbranch manager and Ramos acted in collusion with Balmaceda. On appeal, the CA dismissed
thecomplaint against Ramos, holding that no sufficient evidence existed to prove that Ramos
colluded with
Balmaceda in the latter’s fraudulent manipulations and thus CA SET ASIDE the Decision of the
trial
court insofar as Ramos is concerned. Hence this petition for review on certiorari, filed by the
PhilippineCommercial International Bank.
ISSUE:
Whether or not Ramos who received a portion of the money that Balmaceda took from PCIB,
shouldalso be held liable for the return of this money to the Bank

HELD:

Ramos participation in Balmacedas scheme not proven

The party, whether the plaintiff or the defendant, who asserts the affirmative of an issue has
the onus to prove his assertion in order to obtain a favorable judgment, subject to the overriding
rule that the burden to prove his cause of action never leaves the plaintiff. For the defendant,
an affirmative defense is one that is not merely a denial of an essential ingredient in the
plaintiff's cause of action, but one which, if established, will constitute an "avoidance" of the
claim.[15]

Thus, PCIB, as plaintiff, had to prove, by preponderance of evidence, its positive assertion that
Ramos conspired with Balmaceda in perpetrating the latters scheme to defraud the Bank.

This Court, in Encinas v. National Bookstore, Inc.,[14] defined preponderance of evidence in the
following manner:

"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term "greater weight of the evidence"
or "greater weight of the credible evidence." Preponderance of evidence is a phrase which, in
the last analysis, means probability of the truth. It is evidence which is more convincing to the
court as worthy of belief than that which is offered in opposition thereto.

PCIB itself at fault as employer

Another telling indicator of PCIBs negligence is the fact that it allowed Balmaceda to encash the
Managers checks that were plainly crossed checks. A crossed check is one where two parallel
lines are drawn across its face or across its corner.[28] Based on jurisprudence, the crossing of a
check has the following effects: (a) the check may not be encashed but only deposited in the
bank; (b) the check may be negotiated only once to the one who has an account with the bank;
and (c) the act of crossing the check serves as a warning to the holder that the check has been
issued for a definite purpose and he must inquire if he received the check pursuant to this
purpose; otherwise, he is not a holder in due course.[29] In other words, the crossing of a check
is a warning that the check should be deposited only in the account of the payee. When a check
is crossed, it is the duty of the collecting bank to ascertain that the check is only deposited to
the payees account.[30] In complete disregard of this duty, PCIBs systems allowed Balmaceda to
encash 26 Managers checks which were all crossed checks, or checks payable to the payees
account only.

The General Banking Law of 2000[31] requires of banks the highest standards of integrity and
performance. The banking business is impressed with public interest. Of paramount importance
is the trust and confidence of the public in general in the banking industry. Consequently, the
diligence required of banks is more than that of a Roman pater familias or a good father of a
family.[32] The highest degree of diligence is expected.

6.

REMIGIO ONG V. PEOPLE

FACTS:
Remigio Ong is a businessman who owns Master Metal Craft. One time, he retained the
services of Marcial de Jesus as adviser on technical and financial matters, and also as
President of Erocool Industries (another company owned by Ong).

On December 17, 1992, Ong requested a loan from de Jesus for 130k to pay the 13th
month pay of his employees. De Jesus obliged and produced a Producers Bank Check. To
secure repayment, Ong issued a post- dated FEBTC check for the same amount.
Producers Bank check was cleared and debited to Ong’s account. However, the FEBTC
check bounced due to insufficient funds. De Jesus filed a case against Ong.

The Trial Court found Ong guilty of B.P. 22. The CA affirmed it. Hence this case.

ISSUE:
W/N Ong is liable for violation of B.P. 22.

RULING:
YES. The prosecution clearly established the existence of a loan and subsequent
encashment of Producers Bank

Check. It also established that the FEBTC check issued by petitioner was dishonored due
to insufficiency.

The gravamen of offense punished by B.P 22 is the making and issuing of worthless
check. It’s the mere issuance of any kind of check, regardless of intent of parties.
Petitioner’s arguments (1. that the encashment of the FEBTC check is not clearly
established 2. the check was issued without consideration 3. No proof of receipt of loan
obligation) are immaterial. B.P. 22 punishes the mere issuance. Prejudice or damage is
not even a requisite for conviction. The intent of the law is to curb proliferation of
worthless checks and ensure stability and integrity of checks as means of payment.

The photocopy of demand letter (despite no original copy) is accepted due to the fact
that is has been identified and shown in court when De Jesus testified regarding about
it. Being an issue of credibility of a witness, the trial court is in a better position to
settle such issue. In this case, it judged that the witness, de Jesus, is credible enough to
accept his testimony on the demand letter .

The court affirmed the ruling but removed the sentence of imprisonment. Thus, Ong is
liable only for 150k fine and 130k civil indemnity.

7.
BPI V. CA
232 SCRA 302

FACTS:

Benjamin Naptiza (respondent) deposited a check worth $2,500 in his dollar savings
account with BPI. The check was given to him by Henry Chan and was accepted and
deposited by Naptiza by way of accommodation (Sec. 29 Negotiable Instruments Law).
The original deal between Chan and Naptiza was that as soon as the check was cleared
both would go to the bank to withdraw the amount. Later on however the amount of the
check was withdrawn from the account of Naptiza, despite the check still not being
cleared by the original (and foreign) drawee bank in New York. BPI now seeks to collect
the $2,500 from Naptiza as payment to the debt that BPI incurred when the deposited
check in the respondent’s account was withdrawn. Respondent claims that the
withdrawal was without his permission and was done not in accordance with the bank’s
own rules.

ISSUE:
W/N respondent Napiza is liable to pay the collecting bank BPI.

RULING:
Naptiza is not liable to pay, BPI is held to have been negligent in not following its own
protocol with regard to withdrawal of amounts from deposited checks.

BPI failed to exercise the “diligence of a good father of a family” in allowing the amount
of a deposited check to be withdrawn despite the fact that it still wasn’t cleared by the
drawee bank (in this case a foreign bank in NY). It is admitted that Naptiza did deliver to
Chan a signed blank withdrawal slip which ultimately allowed Ramon de Guzman (Chan’s
cohorts?) to withdraw the amount of the deposited check. However it was the further
negligence of the bank in not following its own rules: not waiting for the clearance of
the foreign check, allowing withdrawal without the account holder’s (respondent’s)
passbook, crediting the amount of the check to the respondent’s account without the
clearance from the foreign bank, allowing the withdrawal to take place without the
presence of the account holder in person, etc. The court held that the encashment of
checks without prior clearance is “contrary to normal or ordinary banking practice
specially so where the drawee bank is a foreign bank and the amounts involved were
large.”

8.

FORTUNADO V. CA
GR NO. 78556, APRIL 25, 1991

FACTS:

The petitioners assail the decision of the Court of Appeals 1 denying mandamus to compel the
sheriff to execute a final deed of sale in their favor.

On April 21, 1981, the Regional Trial Court of Quezon City 2 rendered judgment in Civil Case No.
Q-22367, entitled "Alfaro Fortunado v. Angel Bautista," ordering the defendant to pay damages
to the plaintiff. Pursuant to the said judgment, respondent Basilisa Campano, City Sheriff of
Iligan City, levied upon two parcels of land registered in the name of Bautista located at Iligan
City and covered by TCT Nos. T-7625 and T-14133. The latter lot had already been purchased by
respondent National Steel Corporation as of August 17, 1983, but had not yet been registered in
its name.

After due notice, these lots were sold at public auction to the petitioners as the only bidder on
April 23, 1984. They were issued a certificate of sale which was registered on April 25, 1984.
On January 10, 1985, NSC gave notice to the sheriff of its intention to redeem the lot covered by
TCT No. T-14133. The sheriff suggested that as the two lots had been sold together for the lump
sum of P267,013.00, both of them should be redeemed by NSC.

On February 11, 1985, NSC filed with the trial court an urgent motion to redeem both lots. This
was opposed by the petitioners on the ground that the movant did not have the personality to
intervene.

As the motion remained unresolved and the period of redemption would expire on April 18,
1985, NSC issued to the sheriff on March 20, 1985, PNB Check No. 313551 in the amount of
P296,384.43 as the redemption price for the lot covered by TCT No. T-14133. The sheriff
acknowledged receipt of the check on the same date.

ISSUE: whether or not redemption had been validly effected by the private respondents

HELD:

REMEDIAL LAW; CIVIL PROCEDURE; EXECUTION OF JUDGMENTS; VALIDITY OF TENDER OF

PAYMENT THROUGH CROSSED CHECK FOR EXERCISE OF RIGHT OF REDEMPTION. — The central
issue in this case is whether or not redemption has been validly effected by the private
respondents. Petitioners contended that the check issued by NSC, not being legal tender, could
not be considered payment of the redemption price. Private respondents however contended
that Article 1249 of the New Civil code is inapplicable as it "deals with a mode of extinction of
debts" while the "right to redeem is not an obligation, nor is it intended to discharge a pre-
existing debt." Tolentino v. Court of Appeals, besides citing Javellana, stresses the liberality of
the courts in redemption cases. On the issue of the applicability of Article 1249 of the Civil Code
and the validity of the tender of payment through check, this Court held: Redemption is not
rendered invalid by the fact that the said officer accepted a check for the amount necessary to
make the redemption instead of requiring payment in money. It goes without saying that if he
had seen fit to do so, the officer could have required payment to be made in lawful money, and
he undoubtedly, in accepting a check, placed himself in a position where he could be liable to
the purchaser at the public auction if any damage had been suffered by the latter as a result of
the medium in which payment was made. But this cannot affect the validity of the payment.

2. ID.; ID.; ID.; REDEMPTION WITH RESERVATION OF RIGHT AND REMEDIES, NOT WRONG. — We
find nothing wrong with Bautista’s letter of March 21, 1985, where he made his redemption of
the lot covered by TCT No. T-7625 subject to the reservation that "the same shall not be taken
to mean my acknowledgment of the validity of the aforesaid writ of execution and sale . . . nor .
. . as waiver on my part of any of the legal rights and remedies available to me under the
circumstances." Had he not done so, estoppel might have operated against him. As we held in
Cometa v. IAC, "redemption is an implied admission of the regularity of the sale and would estop
the petitioner from later impugning its validity on that ground" In questioning the writ of
execution and sale and at the same time redeeming his property, Bautista was exercising
alternative reliefs.

3. ID.; ID.; ID.; TENDER OF CHECK SUFFICIENT TO COMPEL REDEMPTION BUT IS NOT IN ITSELF A
PAYMENT. — We are not, by this decision, sanctioning the use of a check for the payment of
obligations over the objection of the creditor. What we are saying is that a check may be used
for the exercise of the right of redemption, the same being a right and not an obligation. The
tender of a check is sufficient to compel redemption but is not in itself a payment that relieves
the redemptioner from his liability to pay the redemption price. In other words, while we hold
that the private respondents properly exercised their right of redemption, they remain liable, of
course, for the payment of the redemption price.